Sberbank, VTB CEOs Damp Talk of Quick Share Sale as Economy Ails

The heads of Russia’s biggest lenders played down a call for stake sales to help narrow a second annual budget deficit this year as the economy slips deeper into recession.

The sale of any stake in Sberbank PJSC is unlikely this year, Chief Executive Officer Herman Gref said Friday at the World Economic Forum in Davos, according to Interfax news service. VTB Group, Russia’s second-largest lender, hasn’t gotten any orders to start preparing the sale, Chief Executive Officer Andrey Kostin said. He said Wednesday that while officials look “quite serious” about a sale this year, depressed prices make a sale “quite difficult.”

Russia’s budget, which depends on oil and gas for half of its revenue, faces deficit that may balloon from 2.6 percent of gross domestic product this year, as crude trades near a 12-year low and the U.S. and Europe maintain sanctions over Russia’s role in the Ukraine conflict. The ruble touched a record low 86 to the dollar Thursday, before rebounding to as much as 78.52 Friday.

Economy Minister Alexei Ulyukayev urged sales of Sberbank and VTB shares this year to help boost the capitalization of the banking system. The government is planning to offer stakes in state-owned companies in the next two years, possibly including the banks and oil producer Rosneft OJSC. In December, Finance Minister Anton Siluanov said the authorities are taking “specific actions” on Rosneft now, without elaborating. Earlier this month, he said the deficit may reach 6 percent of GDP this year if no steps are taken.

Sberbank global depositary receipts have fallen more than 60 percent in London since the start of 2014, before President Vladimir Putin annexed Crimea from Ukraine, while VTB is down 43 percent. Sanctions on the banks have barred them from international capital markets.

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